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Issues: (i) whether provisional attachment under the Prevention of Money Laundering Act, 2002 can be sustained against a person who is not named as an accused in the scheduled offence but is alleged to be in possession of proceeds of crime; (ii) whether property of equivalent value can be attached where the alleged proceeds of crime are traced to the appellants; (iii) whether pendency of challenge to the prosecution complaint or quashing of one scheduled offence case bars continuation of proceedings under the Prevention of Money Laundering Act, 2002.
Issue (i): whether provisional attachment under the Prevention of Money Laundering Act, 2002 can be sustained against a person who is not named as an accused in the scheduled offence but is alleged to be in possession of proceeds of crime.
Analysis: Section 5 of the Prevention of Money Laundering Act, 2002 empowers provisional attachment where the authorised officer has reason to believe, on the basis of material in possession, that any person is in possession of proceeds of crime and that such proceeds are likely to be concealed, transferred, or dealt with in a manner frustrating confiscation. The expression used is "any person", not only an accused in the scheduled offence. Section 2(1)(u) defines proceeds of crime broadly, and Section 3 links the offence to concealment, possession, acquisition, use, or projection of such proceeds as untainted property. The Tribunal applied these provisions and treated the attachment as legally sustainable against a person alleged to be in possession of proceeds of crime even if that person is not named as an accused in the predicate offence.
Conclusion: The issue is answered against the appellants and in favour of the respondent.
Issue (ii): whether property of equivalent value can be attached where the alleged proceeds of crime are traced to the appellants.
Analysis: The Tribunal held that proceeds of crime are not confined only to the exact tainted asset directly derived from the offence. Where the original proceeds are dissipated, concealed, or parked elsewhere, property of equivalent value can also be brought within the sweep of the definition and subjected to attachment. On the facts recorded, the material showed receipt and retention of amounts linked with the alleged criminal activity, and the attachment was upheld to that extent.
Conclusion: The issue is answered against the appellants and in favour of the respondent.
Issue (iii): whether pendency of challenge to the prosecution complaint or quashing of one scheduled offence case bars continuation of proceedings under the Prevention of Money Laundering Act, 2002.
Analysis: The Tribunal held that a mere challenge to the prosecution complaint does not, by itself, nullify or suspend proceedings under the Prevention of Money Laundering Act, 2002. It also noted that quashing, if any, in respect of one FIR does not end the matter where another scheduled offence remains pending and the material shows continuation of the alleged money-laundering activity. The Tribunal therefore declined to interfere on this ground.
Conclusion: The issue is answered against the appellants and in favour of the respondent.
Final Conclusion: The attachment and confirmation order were sustained, and the appeals were found to be without merit.
Ratio Decidendi: For provisional attachment under Section 5 of the Prevention of Money Laundering Act, 2002, the decisive inquiry is whether a person is in possession of proceeds of crime, not whether that person is named as an accused in the scheduled offence; property of equivalent value may also be attached where the tainted proceeds are no longer available in their original form.
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